By Rieva Lesonsky
The improving economy is good news for small business owners in most ways but one. As the economy bounces back from the Great Recession, employees are feeling more confident in their ability to find better jobs elsewhere. And for small business owners, the costs associated with replacing an employee—especially someone in a senior position—can put a big dent in the business budget.
To ensure your business is doing everything possible to retain current employees, as well as making it easier to find qualified new hires if necessary, tap into the power of employee benefits. Medical benefits are a big help in attracting and retaining employees, but truly competitive employers go beyond the basics to offer additional voluntary benefits, such as dental, disability, vision and life insurance.
Why do benefits matter so much? According to the most recent Employee Benefit Trends Study by MetLife and MetLife My Small Business employees who are “very satisfied” with their benefits are almost four times as likely to be very satisfied with their jobs, and are three times as likely to be loyal to their employers. In fact, benefits can even help motivate employees to change their minds about quitting. When MetLife asked employees who were considering leaving their jobs what would motivate them to stay, higher salary was the number-one factor—but “improving my benefits” was number two.
Understanding the financial pressures employees face is a key driver of employee loyalty, and providing employee benefits helps demonstrate that understanding. More than one-third (35 percent) of employees say employee benefits help them worry less about unexpected health and financial issues, making employee benefits the number-one driver of job satisfaction. And almost three-fourths (73 percent) of employees say having benefits offers them “peace of mind.” If you can’t afford to give employees raises, boosting their benefits can accomplish very much the same thing.
The number and variety of benefits you offer matters, too. The study found that offering more than five benefits greatly increases employee satisfaction and loyalty. Variety also helps companies attract new hires—the more benefits you offer, the more likely employees are to recommend your business to others as a good place to work.
So how can you offer all of these benefits while keeping your budget under control? The good news: Cost sharing is becoming widely accepted today. Employees generally expect to pay all or part of the costs of voluntary benefits. However, in order to feel like they are getting good value, they want a wide range of voluntary benefits to choose from.
Voluntary benefits satisfy both your need for cost control and your employees’ desire for choice. They also help you deal with the challenge of managing different generations in the work force. With voluntary benefits, your employees can customize benefits to fit their needs.
For example, a Millennial employee might be thrilled about vision insurance that covers specialized glasses for playing sports. A Gen X employee with three children would be excited about family vision coverage. A Baby Boomer would want vision insurance that covers specialized screenings for age-related conditions such as glaucoma or macular degeneration.
Of course, you can’t always predict the kinds of coverage employees will want based on their ages. For example, Millennials are more likely than any other generation to be interested in purchasing life insurance through the workplace.
To maximize the value of your employee benefits as a hiring, retention and loyalty tool, make sure employees know how to make the most of what you’re offering. Look for an insurance company that provides a variety of ways to educate your workers about their benefits. One-on-one meetings work best for some employees, while others prefer online tools and webinars.
Finally, don’t be shy about tooting your own horn by explaining the value of your voluntary benefits. When I first started working, my employer provided disability coverage. At first, that didn’t mean anything to me—but then the company explained the situations where it would be useful, how scary it could be not to have disability insurance, and how few companies offer it. When employees realize you’re doing all you can to help protect them and provide for their futures, they’ll appreciate what a good place your company is to work.
This post brought to you by MetLife. The content and opinions expressed below are that of Small Biz Daily.